This deal represents an effort by Lowe's parent company, IPG, to revive the fortunes of the ad agency network's London office and one of the industry's most famous agency names. IPG will also put out a statement on Monday morning.

The deal, which one source described as more akin to a partnership than a standard takeover, will still need to be approved by shareholders. "The deal has been done," said a second source with knowledge of the deal.

It is thought senior managers at DLKW will be given stakes in the new merged entity.

Lowe, founded by Sir Frank Lowe in 1981, is best-known for the "Reassuringly expensive" tag for Stella Artois, "Every little helps" for Tesco and Heineken's "Refreshes the parts other beers cannot reach". The agency even created the famous Queen's Club tennis tournament as a vehicle for Stella.

However, in recent years it has hit tough times, losing the £45m-a-year Tesco account and other business including Unilever's Peperami and John Lewis.

For Creston the deal will enable the holding company to pay down debt and invest in other areas of the business. It also owns research firm ICM and ad agency TMW.

Creston bought DLKW in March 2005 in a deal worth up to £38.2m. The original partners completed their earn-outs in April 2008.

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